[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Notices]
[Pages 30072-30075]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14969]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES
[HSQ-231-N]


Medicare, Medicaid, and CLIA Programs; Clinical Laboratory 
Improvement Amendments of 1988 Exemption of Laboratories in the State 
of Oregon

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Notice.

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SUMMARY: Section 353(p) of the Public Health Service Act provides for 
the exemption of laboratories from the requirements of the Clinical 
Laboratory Improvement Amendments of 1988 (CLIA) when the State in 
which they are located has requirements equal to or more stringent than 
those of CLIA. This

[[Page 30073]]

notice grants exemption from CLIA requirements and is applicable only 
to laboratories located within the State of Oregon that possess a valid 
State license.

EFFECTIVE DATE: The provisions of this notice are effective on June 13, 
1996, through December 31, 1999.

FOR FURTHER INFORMATION CALL: Val Coppola, (410) 786-3354.

SUPPLEMENTARY INFORMATION:

I. Background and Legislative Authority

    Section 353 of the Public Health Service Act, as amended by the 
Clinical Laboratory Improvement Amendments of 1988 (CLIA), requires any 
laboratory that performs tests on human specimens to meet the 
requirements established by the Department of Health and Human 
Services. Under the provisions of the sentence following section 
1861(s)(14) and paragraph (s)(16) of the Social Security Act, any 
laboratory that also requests to be paid for services furnished to 
Medicare beneficiaries must meet the requirements of section 353 of the 
Public Health Service Act. Subject to specified exceptions, 
laboratories must have a current and valid CLIA certificate to test 
human specimens to be eligible for payment from the Medicare or 
Medicaid program. Regulations implementing section 353 of the Public 
Health Service Act are contained in 42 CFR part 493, Laboratory 
Requirements.
    Section 353(p) of the Public Health Service Act provides for the 
exemption of laboratories from CLIA requirements in a State that 
applies requirements that are equal to or more stringent than those of 
CLIA. The statute does not specifically require the promulgation of 
criteria for the exemption of laboratories in a State. The decision to 
grant CLIA exemption to laboratories within a State is at HCFA's 
discretion, acting on behalf of the Secretary of Health and Human 
Services.
    Part 493, subpart E, Accreditation by a Private, Nonprofit 
Accreditation Organization or Exemption Under an Approved State 
Laboratory Program implements section 353(p) of the Public Health 
Service Act. Section 493.513 provides that we may exempt from CLIA 
requirements, for a period not to exceed 6 years, State licensed or 
approved laboratories in a State if the State meets specified 
conditions. Section 493.513(k) provides that we will publish a notice 
in the Federal Register announcing the names and basis for exemption of 
States whose laboratories are exempt from meeting the requirements of 
part 493.

II. Notice of Approval of CLIA Exemption to Laboratories in the 
State of Oregon

    In this notice, we grant CLIA exemption for all specialties and 
subspecialties to all laboratories located in the State of Oregon that 
possess a valid license to perform laboratory testing effective June 
13, 1996, through December 31, 1999.

III. Evaluation of The Oregon State Laboratory Program

    The following describes the process we used to determine whether we 
should grant exemption from CLIA requirements to licensed Oregon 
laboratories.

A. Requirements for Granting CLIA Exemption

    To determine whether we should grant a CLIA exemption to all 
laboratories within the State of Oregon, we conducted a detailed and 
indepth comparison of Oregon State's requirements for its laboratories 
to those of CLIA and evaluated whether Oregon State's standards meet 
the requirements at Sec. 493.513. In summary, we evaluated whether the 
State of Oregon--
     Has laws in effect that provide for requirements that are 
equal to or more stringent than CLIA requirements;
     Has an agency that licenses or approves laboratories 
meeting State requirements that also meet or exceed CLIA requirements, 
and would, therefore, meet the condition level requirements of the CLIA 
regulations;
     Demonstrates that it has enforcement authority and 
administrative structures and resources adequate to enforce its 
laboratory requirements;
     Permits us or our agents to inspect laboratories within 
the State;
     Requires laboratories within the State to submit to 
inspections by us or our agents as a condition of licensure;
     Agrees to pay the cost of the validation program 
administered by us and the cost of the State's pro rata share of the 
general overhead to develop and implement CLIA as specified in 
Secs. 493.645(a) Fee(s) applicable to accredited laboratories/approved 
State licensure programs and 493.646(b) Payment of fees; and
     Takes appropriate enforcement action against laboratories 
found by us or our agents not to be in compliance with requirements 
comparable to condition level requirements.
    We also evaluated whether the State of Oregon laboratory program 
meets the requirements and licenses laboratories in accordance with 
Sec. 493.515, Federal review of laboratory requirements of State 
laboratory programs.
    As specified in Sec. 493.515, our review of a State laboratory 
program includes (but is not necessarily limited to) an evaluation of--
     Whether the State's requirements for laboratories are 
equivalent to or more stringent than the CLIA condition level 
requirements;
     The State's inspection process requirements to determine--

--The comparability of the full inspection and complaint inspection 
procedures to our procedures;
--The State's enforcement procedures for laboratories found to be out 
of compliance with its requirements; and
--The ability of the State to provide us with electronic data and 
reports with the adverse or corrective actions resulting from 
proficiency testing results that constitute unsuccessful participation 
in HCFA-approved proficiency testing programs and with other data we 
determine to be necessary for validation and assessment of the State's 
inspection process requirements;

     The State's agreement to--

--Notify us within 30 days of the action taken against any CLIA-exempt 
laboratory that has had its licensure or approval withdrawn or revoked 
or been in any way sanctioned;
--Notify us within 10 days of any deficiency identified in a CLIA-
exempt laboratory in cases when the deficiency poses an immediate 
jeopardy to the laboratory's patients or a hazard to the general 
public;
--Notify each laboratory licensed by the State within 10 days of our 
withdrawal of the exemption;
--Provide us with written notification of any changes in its licensure 
(or approval) and inspection requirements;
--Disclose any laboratory's proficiency testing results in accordance 
with the State's confidentiality requirements;
--Take the appropriate enforcement action against laboratories we find 
not to be in compliance with requirements comparable to condition level 
requirements and report these enforcement actions to us;
--Notify us of all newly licensed laboratories, including the 
specialties and subspecialties for which any laboratory performs 
testing, within 30 days; and
--Provide to us, as requested, inspection schedules for validation 
purposes.

[[Page 30074]]

B. Evaluation of the Oregon State Request for CLIA Exemption

    The State of Oregon has formally applied to us for an exemption 
from the CLIA requirements for laboratories located within the State 
that possess a valid State license.
    We have evaluated the Oregon State's CLIA exemption application and 
all subsequent submissions for equivalency against the three major 
categories of CLIA rules: The implementing regulations, the enforcement 
regulations, and the deeming/exemption requirements. The statutory 
requirements pertaining to laboratories in Oregon are found at Chapter 
438, Clinical Laboratories, in the Oregon Revised Statutes. We found 
the Laboratory Licensing Section of the Center for Public Health 
Laboratories, which issues, implements, and enforces regulations 
specified in the Oregon Administrative Rule, Division 24, Chapter 333, 
to administer a program that is equal to the CLIA program, taken as a 
whole. We performed an indepth evaluation of the Oregon application to 
verify the State's assurance of compliance with the following subparts 
of part 493.

Subpart E, Accreditation by a Private, Nonprofit Accreditation 
Organization or Exemption Under an Approved State Laboratory 
Program

    HCFA and the Centers for Disease Control and Prevention staff 
reviewers have examined the Oregon State application and all subsequent 
submissions against the exemption requirements that a State must meet 
in order to be granted CLIA-exempt status (Sec. 493.513 and the 
applicable parts of Secs. 493.515, 493.517, 493.519, and 493.521, which 
concern General requirements for CLIA-exempt laboratories; Federal 
review of laboratory requirements of State laboratory programs; 
Validation inspections of CLIA-exempt laboratories; Continuing Federal 
oversight of an approved State laboratory program; and Removal of CLIA 
exemption and final determinations review). The State has complied with 
the applicable CLIA requirements for exemption under this subpart.

Subpart H, Participation in Proficiency Testing for Laboratories 
Performing Tests of Moderate Complexity (Including the 
Subcategory), High Complexity, or Any Combination of These Tests

    The Oregon Administrative Rule requires licensed laboratories 
within Oregon to enroll and participate in a HCFA-approved proficiency 
testing program for all tests listed in Subpart I of the CLIA 
regulations. Oregon has adopted the requirements of Subpart H, 
Participation in proficiency testing for laboratories performing tests 
of moderate complexity (including the subcategory), high complexity, or 
any combination of these tests.
    Therefore, the proficiency testing requirements of Oregon are 
equivalent to those of CLIA.

Subpart J, Patient Test Management for Moderate Complexity 
(Including the Subcategory), High Complexity, or Any Combination of 
These Tests

    Oregon has modified its requirements for patient test management to 
be equal to those of the CLIA regulations.

Subpart K, Quality Control for Tests of Moderate Complexity 
(Including the Subcategory), High Complexity, or Any Combination of 
These Tests

    The Oregon Administrative Rule recognizes the CLIA categorization 
of tests and stipulates quality control requirements for moderate 
complexity (including the subcategory of provider performed 
microscopy), and high complexity tests that are equivalent to the 
respective CLIA requirements, taken as a whole.

Subpart M, Personnel for Moderate Complexity (Including the 
Subcategory) and High Complexity Testing

    The personnel requirements of the Oregon Administrative Rule are 
equivalent to those of CLIA for all levels of testing complexity.

Subpart P, Quality Assurance for Moderate Complexity (Including the 
Subcategory) or High Complexity Testing, or Any Combination of 
These Tests

    The applicable standards of the Oregon Administrative Rule are 
equal to the CLIA requirements at Secs. 493.1701 through 493.1721, 
which address quality assurance.

Subpart Q, Inspection

    Oregon laboratories that possess a license for moderate or high 
complexity testing are routinely inspected on-site, biennially. Routine 
inspections are usually announced. All complaint inspections are 
unannounced. The Oregon State Laboratory Licensing Section implements 
inspection requirements and policies that are equal to those of CLIA.

Subpart R, Enforcement Procedures

    We have reviewed documentation of Oregon State's enforcement 
authority, its administrative structure and the resources used to 
enforce its standards. The State appropriately applies limitations and 
revocations of its licenses for laboratories as well as other 
categories of penalties. Dependent upon probable circumstances, Oregon 
may impose a directed plan of correction, it may refuse to issue a 
license or permit, or, if necessary, it could initiate criminal 
penalties.
    The State of Oregon has provided us with the mechanism it currently 
uses to monitor the proficiency testing performance of its 
laboratories. The initial action taken by Oregon State for unsuccessful 
proficiency testing performance requires the laboratory to determine 
the cause of the failure, document corrective actions and provide an 
assurance that patient testing is correctly performed. If no response 
or an inadequate response is received, procedures to remove the 
analyte, subspecialty, or specialty from the laboratory's license will 
be initiated. The State may perform an on-site inspection due to 
unsuccessful proficiency testing performance.
    The State of Oregon has provided appropriate documentation 
demonstrating that its enforcement policies and procedures are 
equivalent to those of CLIA.

IV. Federal Validation Inspections and Continuing Oversight

    The Federal validation inspections of CLIA-exempt laboratories, as 
specified in Sec. 493.517, will be conducted on a representative sample 
basis as well as in response to substantial allegations of 
noncompliance (complaint inspections). The outcome of those validation 
inspections will be our principal means for verifying the 
appropriateness of the exemption given to laboratories in Oregon. This 
Federal monitoring is an on-going process. The State of Oregon will 
provide us with survey findings for each laboratory selected for 
validation.

[[Page 30075]]

V. Removal of Approval of Oregon State Exemption

    We will remove the CLIA exemption of laboratories located in the 
State of Oregon that possess a valid license if we determine the 
outcome and comparability review of validation inspections are not 
acceptable as described under Sec. 493.521 or if the State fails to pay 
the required fee as stated under Sec. 493.645(a).

VI. Laboratory Data

    In accordance with Sec. 493.513(d)(2)(iii), Oregon State will 
provide us with changes to a laboratory's specialties or subspecialties 
based on the State's survey and with changes in a laboratory's 
licensure status.

VII. Required Administrative Actions

    CLIA is a user-fee funded program. The registration fee paid by the 
laboratories is used to cover the cost of the development and 
administration of the program. However, when a State's application for 
exemption is approved, we may not charge a fee to laboratories in the 
State that are covered by the exemption. The State's share of the costs 
associated with CLIA must be collected from the State. Section 493.645 
specifies that Health and Human Services assesses fees that a State 
must pay for the following:
     Costs of Federal inspection of laboratories in the State 
to verify that standards are enforced in an appropriate manner. The 
average cost per validation survey nationally is multiplied by the 
number of surveys that will be conducted.
     Costs incurred for Federal investigations and surveys 
triggered by complaints that are substantiated. We bill the State for 
these costs. We anticipate that most of these surveys will be referred 
to the State and that there will be little Federal activity in this 
area.
     The State's proportionate share of general overhead costs 
for the items and services it benefits from and only for those paid for 
out of registration or certificate fees we collected.
    In order to estimate Oregon State's proportionate share of the 
general overhead costs, we determined the ratio of laboratories in 
Oregon State to the total number of laboratories nationally. In that 
the general overhead costs apply equally to all laboratories, we 
determined the cumulative overhead costs that should be assumed by the 
State of Oregon.
    The State of Oregon has agreed to pay us its pro rata share of the 
overhead costs and anticipated costs of actual validation and complaint 
investigation surveys. A final reconciliation for all laboratories and 
all expenses will be made. We will reimburse the State for any 
overpayment or bill it for any balance.
    In accordance with the provisions of Executive Order 12866, this 
notice was not reviewed by the Office of Management and Budget.

    Authority: Section 353 of the Public Health Service Act (42 
U.S.C. 263a).

    Dated: May 13, 1996.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
[FR Doc. 96-14969 Filed 6-12-96; 8:45 am]
BILLING CODE 4120-01-P